On May 27, 2015, U.S. District Judge Laura Taylor Swain gave final approval to a class action settlement with JPMorgan Chase & Co., which agreed to pay $500 million and up to an additional $5 million in litigation-related expenses to resolve claims arising from the sale of $27.2 billion of mortgage-backed securities issued by Bear Stearns & Co. during 2006 and 2007 in 22 separate public offerings. This is the largest recovery ever achieved in a class action involving mortgage-backed securities.
The settlement resolves claims that Bear Stearns violated federal securities laws by selling certificates backed by approximately 71,000 largely "Alt-A" mortgages. Investors alleged that the offering documents used to issue the mortgage-backed securities contained material misstatements and omitted key facts relating to the underwriting guidelines used by Bear's EMC Mortgage unit, Countrywide Home Loans, and other lenders; the accuracy of associated property appraisals, and the overall quality of the collateral.
Cohen Milstein, which was appointed co-lead counsel in this case in December 2009, represents co-lead plaintiff the New Jersey Carpenters Health Fund as well as additional plaintiffs Boilermakers Blacksmith National Pension Trust, the Oregon Public Employees Retirement System and the Iowa Public Employees Retirement System.
Cohen Milstein’s team included Daniel S. Sommers, Christopher Lometti, Richard Speirs, and S. Douglas Bunch.
The case is In re Bear Stearns Mortgage Pass-Through Certificates Litigation, Case No. 1:08-cv-08093, in the U.S. District Court for the Southern District of New York.